Contingent funding approaches are rapidly becoming more widespread, partly thanks to big changes in regulation.
They can be a great way to protect member benefits as well as the shareholders and other creditors of the sponsoring employer.
As contingent funding approaches have now moved from a niche area of pensions management to the mainstream, they should be considered by every trustee board and sponsor.
How can we help
We will help you meet the new funding requirements whilst making most efficient use of company resources. We support companies and trustees to focus on how members will get their benefits without compromising shareholder value.
We help companies and trustees consider the full range of contingent funding approaches in many different situations. Some examples include:
- Designing and implementing a true Integrated Risk Management framework for pensions, addressing both upside and downside contingencies and responding flexibly to ongoing changes
- Designing an investment strategy that is appropriately supported
- Managing events that change the covenant strength, including M&A, debt restructuring, “covenant leakage” events and so on
- Understanding how contingent funding can be used to help support a “Bespoke” approach to pension funding
- Providing support that maintains flexibility for the sponsoring entity
- Minimising the risk of a trapped surplus when executing a full scheme buy-in
- Managing the risks of overfunding
- Minimising the PPF levy
- Responding to the pensions implications of the Corporate Insolvency and Governance Act
- Helping to manage potential conflicts between dividend policy and the pension scheme
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